Petitioners appealed to LUBA from the county's approval of a "paintball
park." They made two assignments of error. LUBA sustained petitioners' second
assignment, concluding that the county governing body (board) erred in holding that
petitioners Novick and Strand were not entitled to exercise certain participatory rights at
the board hearing under the county's procedural regulations. Because LUBA's
disposition of the second assignment of error necessitated a remand and the resulting
possibility that the local "evidentiary record may be expanded by additional proceedings
before the county," LUBA concluded that "it would be premature to address" petitioners'
first assignment, in which they raised, inter alia, a substantial evidence challenge to the
county's decision.

After LUBA made its decision on the merits, petitioners moved for attorney
fees and expenses. As explained in LUBA's order on the attorney fee petition, petitioners
asserted that they were entitled to attorney fees on the ground that the county's "position
in response to petitioners' second assignment of error" lacked probable cause and was
therefore sanctionable by an attorney fee award pursuant to ORS 197.830(14)(b)
(emphasis supplied). Insofar as we are advised, the petition was not based on and made
no assertion about the existence or absence of probable cause for the county's response to
petitioners' other assignment of error, which LUBA had not reached in its decision on the
merits. In any event, LUBA's disposition of the attorney fee issue was based solely on
petitioners' contention that the county's response to one of the two assignments of error
was lacking in all merit.

As noted, LUBA's order on the petition for attorney fees in this case
predated our decision in Fechtig. LUBA's order here summarized the holding in its
decision in that case and found it to be distinguishable. LUBA explained:

"However, the rule adopted in Fechtig does not readily apply to
situations such as the one at hand, where a successful petitioner attempts to
recover attorney fees from a local government. The positions presented by
respondents (and intervenors-respondent) in a LUBA appeal are necessarily
dependent upon the positions presented in the petition for review. Under
the rule stated in Fechtig, a respondent would be able to avoid an award of
attorney fees if any one of the petitioner's assignments of error were denied,
regardless of the relative merits of that single assignment of error. We do
not believe that a respondent should be allowed to avoid an award of
attorney fees under ORS 197.830(14)(b) solely because petitioner is unable
to prevail on every assignment of error raised in a petition for review.

LUBA then proceeded to analyze petitioners' argument that the county's
response to petitioners' second assignment was wholly lacking in merit. LUBA rejected
the argument. It concluded that, despite its own disagreement with the merits of the
county's defense, the county had "reasonably relied on [its governing body's]
interpretation of its own rules for on-the-record hearings," and thereby cleared the "low
threshold" that ORS 197.830(14)(b) establishes for the avoidance of the attorney fee
sanction that it authorizes.

The central issue that the parties disputed before us and that we decided in
Fechtig was whether ORS 197.830(14)(b) allows attorney fees to be assessed against a
party if some, but not all, of its arguments in an appeal to LUBA lack probable cause, or
whether the statute requires that all of the party's arguments be devoid of merit in order
for the attorney fee sanction to be invoked against it. Based on the language, relevant
context and history of the statute, we held that fees may be assessed only if all of a party's
arguments lack merit.

LUBA's opinion in this case would have the effect of making that rule
applicable when the party from whom the attorney fees are sought is the appellant, but
not when attorney fees are sought from a governmental body or other respondent.
Nothing in the language of the statute permits such a distinction. By its terms, ORS
197.830(14)(b) refers to "any [nonprevailing] party" who has presented a wholly
meritless position as a potential target for attorney fees. It does not differentiate in any
way between parties on the basis of whether they are appellants or respondents before
LUBA, or on any other basis except whether they prevailed or lost in the LUBA appeal.
We stated in our Fechtig opinion--and noted that LUBA had also observed--that the
apparent reason for the linguistic differences between ORS 197.830(14)(b) and ORS
19.160, on which it was modeled, was to make all nonprevailing parties, rather than
appellants alone, potentially sanctionable "to the same extent." Id. at 19; see also id. at
27.

Moreover, the difference in the way LUBA's present opinion proposes to
treat appellants and respondents would be quite anomalous. Although an appellant
would still be subject to attorney fees only if every assignment and argument in its appeal
is lacking in probable cause, attorney fees potentially could be awarded against a
respondent based solely on the meritlessness of its arguments opposing the appellant's
assignments that LUBA sustains, regardless of whether the respondent has made
meritorious or even "winning" arguments in opposition to the appellant's assignments
that LUBA rejects or does not reach. LUBA's distinction would potentially place
respondents in exactly the position that Fechtig holds ORS 197.830(14)(b) was not
intended to place any party. Under LUBA's formulation, attorney fees could be awarded
against a respondent if it made a single meritless argument, if that argument happened to
be in response to the single assignment on which the appellant prevailed, even though all
of the appellant's other assignments and arguments might be meritless or be unsuccessful
for the very reason that the respondent made meritorious and convincing arguments
against them. In sum, LUBA's approach would subject respondents who make some
unmeritorious as well as some meritorious arguments to possible attorney fee awards,
when appellants cannot be similarly sanctioned unless all of their arguments are
meritless; indeed, the odds of such an award against a respondent would increase in
direct proportion to the number of assignments on which the respondent prevails and the
appellant loses, because the sample of unsuccessful responses in which merit might be
found would be correspondingly reduced.

Insofar as LUBA's analysis in the present case is inconsistent with our
opinion in Fechtig, we disagree with LUBA's reasoning. However, notwithstanding the
reasons why LUBA reached the question of whether the county's response to petitioners'
second assignment lacked probable cause, its doing so was not error. If there was
probable cause for the county's argument in response to that assignment, then, regardless
of any other issues, the county could not be subject to an attorney fee award under the
statutory test described in Fechtig. We also agree with LUBA that the county's argument
was meritorious enough to pass the probable cause test under the statute and Fechtig.

"LUBA sidestepped analyzing the obvious linkage between the
standards in the attorney fees and local deference statutes. Based on the
language of the statutes and the [interpretive] case law, petitioners believe
the linkage is clear."

The only similarity between the two tests that petitioners identify is that
they are both stringent ones for the party invoking them and, correspondingly, both
standards tend to create a low threshold for the party seeking to defend under them.
However, the two tests relate to entirely different things. Here, for example, the "clearly
wrong" test applied to the county's position on the merits in the underlying appeal to
LUBA and to the reversibility of the ordinance interpretation that it made as a
decisionmaker. Conversely, the "probable cause" test does not apply simply to whether
the county's interpretation was reversible on the merits but to whether its defense of the
interpretation as a litigant was so untenable that a reasonable litigant could not have
advanced it. See, generally, Fechtig, 150 Or App at 13-15.

Petitioners' argument blurs the two distinct functions and the two distinct
tests. A county or other respondent defending the county's decision as a litigant does not
make an interpretation; it performs an after-the-fact evaluation and, if possible, defense
of the interpretation that the county governing body has made. The "clearly wrong" test
applies to the governing body's interpretation and to the disposition of the respondent's
defense of the interpretation. As a general proposition, however, the question of whether
there is probable cause for a defense under ORS 197.830(14)(b) does not depend on a
successful result but on whether it presents a "debatable" question "over which * * *
reasonable * * * discussion may arise." Fechtig, 150 Or App at 14 (quoting Broyles v.
Estate of Brown, 295 Or 795, 800-01, 671 P2d 94 (1983)).

Petitioners maintain that that general rule does not apply when an
interpretation fails the "clearly wrong" test, and that that disposition necessarily means
that the respondent's defense of the interpretation lacks probable cause. Petitioners'
premise is that, in order to be reversible under the "clearly wrong" test, the interpretation
must be so wanting that no argument in its support by a respondent can be tenable. As
noted, however, Broyles and Fechtig both make clear that the fact that an argument is
rejected on its merits does not mean ipso facto that there was not "probable cause" for its
assertion. We are not persuaded that there is any basis for not applying that principle or
for applying it differently depending on the nature of the legal standard that the argument
must satisfy. We do not agree with petitioners that an argument is necessarily completely
meritless and untenable, simply because it did not meet with success and the applicable
standard is one that tends to be favorable to parties in the position of the one offering the
argument. In situations of that kind, as in most others, there is no inherent and invariable
reason why an argument cannot rise to the level of the "debatable" and still fall short of
prevailing. In other words, an argument in defense of an interpretation can be reasonably
debatable, even if the interpretation itself is "clearly wrong."

Although there no doubt can be circumstances where a local interpretation
is so obviously destitute that a reasonable lawyer could not attempt to defend it even
under the "clearly wrong" test, petitioners do not argue that there is anything particular
about the interpretation here that brings it within that category. Rather, petitioners
simply present a per se argument that there can never be "probable cause" under ORS
197.830(14)(b) for the defense of an interpretation that LUBA holds to be "clearly
wrong" on its merits. Petitioners are incorrect on that point, and they provide no other
basis for concluding that LUBA erred in finding that there was probable cause for the
county's argument. Accordingly, LUBA was also correct in its holding that petitioners
are not entitled to attorney fees under ORS 197.830(14)(b).

"award reasonable attorney fees and expenses to the prevailing party
against any other party who [LUBA] finds presented a position without
probable cause to believe the position was well-founded in law or on
factually supported information."

2. For purpose of the discussion here, it suffices to say that we said by way of
summary that "terms such as 'meritless'" mean "that the presentations to which they refer
are lacking in any arguable support, as distinct from 'simply' being incorrect." Id. at 15 n
3. (Emphasis in original.)

4. By noting the likely availability of such a procedure, we do not wish to be
understood as affirmatively endorsing its use. There is a certain tail-wagging-the-dog
quality to petitioners' implicit suggestion that the decision of the merits of a case needs to
be tailored to enable the prevailing party to bring itself within a statute that provides for
sanctions against the other. The overriding purpose of the adjudicative process is to
resolve controversies, not to provide a forum for the resolution of extraneous questions
that bear only on whether one party is entitled to extraordinary remedies against the other
in connection with the litigation process itself.

5. Petitioners also rely on deBardelaben v. Tillamook County, 142 Or App
319, 922 P2d 683 (1996), and Zippel v. Josephine County, 128 Or App 458, 876 P2d
854, rev den 320 Or 272 (1994), where we used phrases other than "clearly wrong" to
synopsize the test. We explained in deBardelaben that our alternative phrasing in Zippel
and, inferentially, in deBardelaben itself, was simply "the equivalent [of the clearly
wrong] test" that we stated "in a different way[.]" 142 Or App at 324. Petitioners are
correct in describing the test, however phrased, as a "highly deferential review standard."